Tuesday, October 4, 2011

October is the cruelest month

     For stocks it is.  Here are some fun market facts for stocks in October

  • October 28-29 1929 The stock market crashed 25% in two days heralding the onset of the great depression
  • October 19,1987 The stock market crashed 20% in one day on what became known as Black Monday
  • October 6-10, 2008 The stock market dropped 20% in one week as it looked like the entire financial system was going to meltdown.  
  • October has marked the end of the 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998 and 2002 bear markets
     The lesson?  While there is lots of panic now, get your buy list ready because there are going to be some bargains out there coming up.

     Markets have opened sharply lower today as the European Union has denied a vital aid payment to Greece.  The Greeks keep missing their budgeting targets and the European Union has said that they must cut more.  It looks like a Greek default is imminent and that is why market's are crashing.  Like I said before, trying to get money out the Greek people is like squeezing blood from a turnip!  It's time to let Greece default and let the chips fall where they may.  This extend and pretend just isn't working anymore.

Market Recap
     WOW, WHAT A FREAKING DAY FOR THE MARKET!!!!!!  Just insane movements today.  In the last hour of trading, we moved up over 350 points!!  There was some BIG BIG MONEY in the markets today buying in the last hour of trading.  Some say it was the PPT or Plunge Protection Team, but whatever it was, big institutions were putting money to work today in the markets.

     The DJIA ended up 153 points today after earlier being down as much as 250 points.  The S&P 500 more than 2% and the NASDAQ was up 3%.  Oil was down 1% and gold was down 3%!  This looks like the bottom for now.

     In the early going stocks spiked up and I thought we might have a huge reversal today so I closed my short positions that I opened yesterday for a tiny loss.  Good thing I did because had I kept them I would have been stopped out already!!  The Dumb Money indicator works!

     Unfortunately, I did not go long at the end of the day because my brain is fried right now watching this crazy action and I was too frozen to do anything.  I would have loved to buy some AAPL today which tagged it's 200 day moving average in a vicious selloff on the release of the iPhone 4GS.  Apple dropped from 384 to 354 during the day and then bounced hugely off the 200 day moving average to finish at 372.

     Just an insane day in the markets today.  I went ahead and bought some small caps, european large caps and ems today for my long term portfolio.  This could be the bottom for awhile.  Let's see what happens.

    

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!
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27 comments:

  1. MoOctober 4, 2011 at 8:40 AM

    I would prolly still keep my cash on the sideline. But once Europe gets its act together got to invest fast.

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  2. DWeiOctober 4, 2011 at 8:50 AM

    Once midterms are done I'll be buying like a madman hopefully.

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  3. my day in a sentenceOctober 4, 2011 at 9:39 AM

    Hard luck. :D

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  4. D4October 4, 2011 at 9:45 AM

    So, it would be a good thing if we can get through October, right? Right?

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  5. 1904 BloggerOctober 4, 2011 at 10:38 AM

    sounds like the time to buy!

    what do you recommend for someone trying to start out buying small amounts of stock?

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  6. AllenTeschOctober 4, 2011 at 11:37 AM

    Plus, my birthday is in October!

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  7. Life, Liberty and AccountabilityOctober 4, 2011 at 11:43 AM

    I agree with what you're saying about greece; they gotta let it happen, cap'n

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  8. LexsaOctober 4, 2011 at 11:49 AM

    stock market dropped 20%

    0_0 omg !! not real

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  9. BerserculesOctober 4, 2011 at 11:52 AM

    Everyone is drunk from Oktoberfest.

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  10. RawrOctober 4, 2011 at 11:58 AM

    interesting post!

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  11. neatfitOctober 4, 2011 at 12:04 PM

    I never thought they would be able to save Greece, they will probably stop completely soon, then Italy will crumble, and then.. Well, we'll see.

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  12. Noah HomolaOctober 4, 2011 at 1:00 PM

    Hmmm...wonder what the deal with October is. Oh well, good thing I don't have any money invested.

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  13. OutcastOctober 4, 2011 at 1:15 PM

    I wonder what it is that causes stocks to fall so much in October, maybe it's Halloween related or something.

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  14. Max PowerOctober 4, 2011 at 1:17 PM

    @D4

    yes, if we can get through October and we don't get any surprises from Europe we should be okay.

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  15. Max PowerOctober 4, 2011 at 1:22 PM

    @1904 blogger

    I don't make any recommendations on stocks to buy as I would hate to see anyone lose money. The one thing I can tell you, is to know your risk tolerance. What will you do if your stocks drop? Are you going to sell and lock in the loss or will you ride it out.

    Another thing is, you should only invest money you can afford to lose. If you are going to need the money anytime soon, stocks are not the place to be.

    I am not a financial advisor and I don't know how much you know about the stock market, but I would suggest you go and talk to some people on this message board i frequent. They are very knowledgeable and will give you good advice.

    http://socialize.morningstar.com/NewSocialize/forums/100000002.aspx

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  16. Lord PhrozenOctober 4, 2011 at 1:41 PM

    Someone loses, someone gains. That's how it all goes...

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  17. MRanthropeOctober 4, 2011 at 1:44 PM

    "October 2011, the month Occupy Wall Street shuts down the exchange."

    I can already see the headlines!

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  18. Hasidic PlumberOctober 4, 2011 at 2:46 PM

    I will put my douche hat on and say that the black monday happening in october, was simply a coincidence. But i guess it adds to the october hex hahaha today it was a crazy day indeed. So much money to be made in the months to come, i'm actually excited about it.

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  19. AnonymousOctober 4, 2011 at 4:58 PM

    ...and here comes the collapse.

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  20. MochileiroOctober 4, 2011 at 6:26 PM

    It will be a lean Christmas, if continue this pessimism.

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  21. heddinOctober 4, 2011 at 6:31 PM

    Losses after losses, it's all so great. The money I don't have will eventually be worth as much as all the money everyone else has! That's how things work, right?

    ReplyDelete
  22. AnonymousOctober 4, 2011 at 11:55 PM

    Now I know why this is the suicide's month.

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  23. JaseOctober 5, 2011 at 1:36 AM

    A huge article, but a very interesting read. I do look forward to your next update and post because you have a unique writing style!

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  24. GizmoOctober 5, 2011 at 6:15 AM

    So statistically, you should sell everything before October :P

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  25. GizmoOctober 5, 2011 at 6:16 AM

    So statistically, you should sell everything before October :P

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  26. Max PowerOctober 5, 2011 at 1:48 PM

    @Gizmo

    there is a saying on wall street. "Sell in may and go away" October is the time to buy.

    ReplyDelete
  27. AnonymousOctober 13, 2011 at 1:58 PM

    looks like your advice is paying off so far!

    ReplyDelete

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